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The beginning of scarcity in AI

tomtunguz.com

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Re: The beginning of scarcity in AI

#101

Post by ElFitz »

thelastgallon wrote: post #66
leptons wrote: post #62

Earlier quoted context omitted.

"The dog that caught the car" refers to how dogs sometimes chase cars. Suppose the car stops and the dog catches up - what is it going to do? It has no plan, it has no purpose, it isn't going to bite the car, it isn't going to get anything out of catching the car. The car may even run it over. I intended it basically as "play stupid games, win stupid prizes", or "be careful what you wish for".

My observation is that the dog sniffs all the tires, picks one tire, lifts one leg and does the deed. I don't know if its a way of marking territory or domination. We need a dogatologist to explain what it means.

That was quite the unexpected anticlimactic ending. I’m sure Terry Pratchett would be proud.

Re: The beginning of scarcity in AI

#102

Post by rstuart4133 »

incrudible wrote: post #88
rstuart4133 wrote: post #74

Earlier quoted context omitted.

I used LLMs to write what seems like far too many lines of code now. This is an example Opus 4.6 running at maximum wrote in C: if (foo == NULL) { log_the_error(...); goto END; } END: free(foo); If you don't know C, in older versions that can be a catastrophic failure. (The issue is so serious in modern C `free(NULL)` is a no-op.) If it's difficult to get a `FOO == NULL` without extensive mocking (this is often the c…

C is fundamentally a bad target for LLMs. Humans get C wrong all the time, so we can not hope the nascent LLM, which has been trained on 95% code that does automatic memory management, to excel here. I always found myself writing verbose copypasta code first, then compress it down based on the emerging commonalities. I think doing it the other way around is likely to lead to a worse design. Can you not tell the LLM t…

> I always found myself writing verbose copypasta code first, then compress it down based on the emerging commonalities. I think doing it the other way around is likely to lead to a worse design.

I do pretty much the same thing, which is to say I "write code using a brain dump", "look for commonalities that tickle the neurons", then "refactor". Lather, rinse, and repeat until I'm happy.

> Can you not tell the LLM to do the same?

You can tell them until you're blue in the face. They ignore you.

I'm sure this is a temporary phase. Once they solve the problem, coding will suffer the same fate as blacksmiths making nails. [0] To solve it they need to satisfy two conflicting goals - DRY the code out, while keeping interconnections between modules to a minimum. That isn't easy. In fact it's so hard people who do it well and can do it across scales are called senior software engineers. Once models master that trick, they won't be needed any more.

By "they" I mean "me".

[0] Blacksmiths could produce 1,000 or so a day, but it must have been a mind-numbing day even if it paid the bills. Then automation came along, and produced them at over a nail per second.

Re: The beginning of scarcity in AI

#103

Post by finaard »

keiferski wrote: post #89

We just had a realization during a demo call the other day: The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. Not being dependent on LLMs for your fundamental product’s value will be a major advantage, at least in pricing.

How is that surprising? We've been taking that into account for any LLM related tooling for over a year now that we either can drop it, or have it designed in a way that we can switch to a selfhosted model when throwing money at hardware would pay for itself quickly.

It's just another instance of cloud dependency, and people should've learned something from that over the last two decades.

Re: The beginning of scarcity in AI

#104

Post by busfahrer »

com2kid wrote: post #26
dmazin wrote: post #14

Constraints can lead to innovation. Just two things that I think will get dramatically better now that companies have incentive to focus on them: * harness design * small models (both local and not) I think there is tremendous low hanging fruit in both areas still.

China already operates like this. Low cost specialized models are the name of the game. Cheaper to train, easy to deploy. The US has a problem of too much money leading to wasteful spending. If we go back to the 80s/90s, remember OS/2 vs Windows. OS/2 had more resources, more money behind it, more developers, and they built a bigger system that took more resources to run. Mac vs Lisa. Mac team had constraints, Lisa t…

> Low cost specialized models

Can you elaborate on this? Is this something that companies would train themselves?

Re: The beginning of scarcity in AI

#105

Post by wg0 »

billziss wrote: post #100
wg0 wrote: post #92

Earlier quoted context omitted.

Assuming there are 10 million developers and everyone is at $200 max plan, that would be $2 billion/month or $24 billion/year maximum. Note - this is just the revenue not the profit. No salaries, no compute paid for. Just plain revenue. Profit would be way less. But even that - if we take it to $24 billion/year and we take a 10x multiple, the company is barely valued at $240 billon dollar, lets be generous and make i…

While I agree with you that AI companies are overvalued, I think 10 million developers at $200 per month makes 2 billion. >>> f"{10_000_000 * 200:_}" '2_000_000_000'

Thanks for pointing out. I updated the comment.

Re: The beginning of scarcity in AI

#107

Post by michaelbuckbee »

keiferski wrote: post #89

We just had a realization during a demo call the other day: The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. Not being dependent on LLMs for your fundamental product’s value will be a major advantage, at least in pricing.

What's weird though is the bifurcation in pricing in the market: aka if your app can function on a non-frontier level AI you can use last years model at a fraction of the cost.

Re: The beginning of scarcity in AI

#108

Post by coldtea »

tasoeur wrote: post #90
com2kid wrote: post #26

Earlier quoted context omitted.

China already operates like this. Low cost specialized models are the name of the game. Cheaper to train, easy to deploy. The US has a problem of too much money leading to wasteful spending. If we go back to the 80s/90s, remember OS/2 vs Windows. OS/2 had more resources, more money behind it, more developers, and they built a bigger system that took more resources to run. Mac vs Lisa. Mac team had constraints, Lisa t…

Though I do agree with you, I just came back from a trip to China (Shanghai more specifically) and while attending a couple AI events, the overwhelming majority of people there were using VPNs to access Claude code and codex :-/

Parent's point was about deployment, not agentic coding.

Re: The beginning of scarcity in AI

#109

Post by michaelje »

keiferski wrote: post #89

We just had a realization during a demo call the other day: The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. Not being dependent on LLMs for your fundamental product’s value will be a major advantage, at least in pricing.

Absolutely. Pricing exposure is the quiet story under all the waves of AI hype. Build for convenience → subsidise for dependence → meter for margin is a well-worn playbook, and AI-dependent companies are about to find out what phase three feels like.

Hyperscalers are spending a fortune so we think AI = API, but renting intelligence is a business model, not a technical inevitability.

Shameless link to my post on this: https://mjeggleton.com/blog/AIs-mainframe-moment

Re: The beginning of scarcity in AI

#110

Post by muppetman »

keiferski wrote: post #89

We just had a realization during a demo call the other day: The companies that are entirely AI-dependent may need to raise prices dramatically as AI prices go up. Not being dependent on LLMs for your fundamental product’s value will be a major advantage, at least in pricing.

No shit. People are just figuring this out now?

This is the “Building my entire livelihood on Facebook, oh no what?” all over again.

Oh no sorry I forgot, your laptops LLM can draw a potato, let me invest in you.

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